The New Strategic Imperative forThe New Strategic Imperative forOrganisational Success:Organisational Success:Hyper-Decision MakingHyper-Decision Making

““Nothing is more difficult andNothing is more difficult andtherefore more precious thantherefore more precious than

to be able to decide”to be able to decide”Napoleon BonaparteNapoleon Bonaparte

Whether You Like it of Not, You are Competing Whether You Like it of Not, You are Competing for the Future and the Clock is Ticking!for the Future and the Clock is Ticking!

Your Organisation’s Future may well dependon the choices you make now!

Some Truths about Decision MakingSome Truths about Decision Making

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Some Truths about Decision Making: Some Truths about Decision Making: Research FindingsResearch Findings

Approximately 86% of organizations do not consistently follow a formal approach to ensuring

sound decisions.

Source: Decision Intelligence Institute International

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What is the best organisational culture to support consistent, effective and efficient decision making?

How should you assess the quality of a decision? What are the people competencies most critical to supporting decision making

success at all levels? What is the ideal infrastructure to enhance the speed and quality of decision

making? What does a ‘best practise’ decision making process look like?

How do ensure it is systematic, integrated and comprehensive? What is the ideal ‘sensing system’ for your organisation – the one that will

deliver, consistently, the best quality information and the right information when you need it for any decision situation?

How does lack of alignment with your organisation’s purpose and vision reduce the ‘optimality’ and the ultimate impact of any decision you make?

What are the unique factors about your organisation’s context and/or operating environment that will most heavily influence your decision making success or failure – making it unique and different from any other organisation?

Is decision-making in your organisation at least a ‘zero-sum’ game?

What this Research Does Not Tell YouWhat this Research Does Not Tell You

Why you need an excellent Why you need an excellent ‘Sensing‘SensingSystem’ System’ to ensure the right actionable to ensure the right actionable

information is available when you need information is available when you need it to drive the best decisions consistently!it to drive the best decisions consistently!

The Changing Requirements for Information

Rapidly Changing Stable

Stable

RapidlyChanging

Mar

ket

Co

nd

itio

ns

(c

ust

om

ers

& c

om

pe

titi

on

)Technology

Where is your organisation today? How fast is your operating and market environment changing? You are competing for the future. The clock is ticking. How do you ensure

you are a ‘winner’ not just an ‘also ran’? Information is one of the keys to success!

Increased need for “real” time

data & information•Customer

•Market•Competition

© Dr. Ted Marra

Decision Science is Really Quite Simple Decision Science is Really Quite Simple As there are only two Decisions As there are only two Decisions

that can ever be made!that can ever be made!

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You can ‘do nothing’ or ‘do something’ – that’s it! The issue is that both have consequences!

If you ‘do nothing’ what are the risks and consequences? If you ‘do something’ what will the consequences be – the ripple

effect? Now - as well as in the future? That is, will your decision now

preclude you from doing something important for the organisation in the future?

To complicate matters, when you ‘do something’ there are always ‘multiple’ actions you can take!

Which one will be closest to being optimal and how do you assess the impact or gauge the outcome? Do you have the right analytics to support you? Or are you using ‘gut feel’?

How do you ensure the best outcome for your organisation? How and how well do you assess or forecast potential unintended

consequences?

Decision Science is Simple!Decision Science is Simple!

Critical Issues to ConsiderCritical Issues to Consider

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Decision making is NOT an exact science. However, the good news is that there are methodologies and tools which can significantly improve your odds of getting it right – first time, every time!

Plato once said that ‘Incomplete information is worthless’. The fact of the matter is that decisions are made by the millions everyday based upon incomplete information!

However, what is true is that with the dynamic and turbulent operating environments in which most organisations find themselves today, incomplete information is only one of the decision related issues they face. The others include, but are not limited to:

The need for faster decisions – to be more agile Growing complexity – more variables/parameters to consider which can influence

the decision made as well as the outcome achieved Ever greater risk or uncertainty as the gap between the information needed for the

optimal decision and the information available – both in terms of quality and quantity - is growing

Knowledge can become obsolete more quickly which is why continuous learning is key

Accurately determining the desired outcome or how to achieve it is a nontrivial exercise – it cannot be based upon guesswork but must now include hard and most appropriate analytics

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Critical Issues to ConsiderCritical Issues to Consider

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So, just how important is effective and efficient decision making to the future success of your business? (scale of 1-10)

What are those strategically important positions within the organisation where you need to make the best talent to make the best decisions possible on a consistent daily or weekly basis?

What is the economic value of the decisions your organisation makes every week or quarter?

The costs associated with the decision? The benefits (impact) of the decisions? Are you breaking even?

What do you do e.g., actions do you normally take) when the decision made does not have the desired impact?

What is the cost of a bad decision – tangible as well as intangible? What if you could increase the % of ‘optimal’ decisions made in your organisation

from where it is now to 80%+ on a consistent basis, would that have value? The Decision Intelligence Institute International estimates that it is not unusual for 40-

50% of decisions to be sub-optimal and/or to fail to meet their expected level of impact The sooner you can make the best – the ‘right’ decision for the organisation, the

sooner you can start reaping the benefits! Sometimes, ‘small moves smartly made’ yields greater results!

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Critical Issues to ConsiderCritical Issues to Considercontinuedcontinued

The Critical Success FactorsThe Critical Success FactorsBehind Effective Decision MakingBehind Effective Decision Making

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The Critical Success FactorsThe Critical Success FactorsBehind Effective Decision MakingBehind Effective Decision Making

IT / Sensing System &

Analytic Capability

Culture: Values /beliefs & Practises

Unique Business Context

Alignment with Purpose

& Vision

Infrastructure

Based on Whitepaper By Dr. Ted Marra on Hyper-Decision Making

Decision Process: Systematic Integrated

Comprehensive Constraint Free

The Decision Making ProcessThe Decision Making Process““High Level” ViewHigh Level” View

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The Decision Making ProcessThe Decision Making Process“High Level” View“High Level” View

“Systematic, Integrated, Comprehensive”Moving Toward Hyper-Decision Making

Decide**

Feedback Loop to Planning and Future Decision Making and Execution

• = Identify, collect and analyse the right and most comprehensive data and information; ensure that not only core decision factors but also other ‘influencing’ factors are considered;

include a rigorous evaluation (not just a ‘gut feel’) of the potential consequences of alternatives including what would happen if only 50% of the desired impact occurred; the value created and/or delivered

and to whom; what if we did nothing?

** = Is the decision approaching optimality?

*** = Is the execution flawless?

**** = Are the right , best and most advanced analytical tools being utilised for assessment?

Decide**

The Truth About RiskThe Truth About Risk

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Complexity Number of variables/parameters and an inability to be able to separate high impact variables from

low impact ones Inability to recognise inter-relationships/linkages Inability to understand ‘cause and effect’ relationships

Incomplete information Dysfunctional, inappropriate ‘sensing system’ (Strategic Enterprise Information Architecture) Lack of integration of data sources and analytics ‘Sensing system’ is not comprehensive – critical pieces are missing Too much data and not enough actionable information which is needed to drive effective and

efficient decision making Questionable Information Quality such as:

Timeliness Reliability Accuracy

Failure to identify emerging trends or see patterns in the data soon enough Lack of anticipation or failure to be proactive

Use of misleading or inappropriate indicators For example: market share being used as a surrogate measure of customer satisfaction

Use of high level indicators which are ‘insensitive’ to changes For example: focus on ‘profitability’ rather than the ‘drivers’ of profitability such as customer

satisfaction, service quality or willingness to recommend

The ‘Drivers’ of RiskThe ‘Drivers’ of Risk

The 9 Areas for Potential Value The 9 Areas for Potential Value Creation and Delivery as a Result of Creation and Delivery as a Result of

the Decisions You Makethe Decisions You Make

BrandImage/

Reputation

Process

Product

Service

CustomerSupport

Technology

Information

The StakeholderExperience

People

The 9 Areas of Opportunity to Create The 9 Areas of Opportunity to Create and Deliver Valueand Deliver Value

From a BookBy Dr. Marra

The Wisdom Chronicles: Competing to Win, Volume I

The Four Signs of Decision DoomThe Four Signs of Decision Doom

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Lack of clarity on the desired outcome Decision process is not systematic, integrated and comprehensive

Failure to appropriately consider outside influences Decision process is not systematic, integrated and comprehensive

No broad exploration of consequences – positive or negative Lack of use of most appropriate advanced decision analytics and

their integration into the decision process

Missing feedback loops Decision process is not systematic, integrated and comprehensive

The Four Signs of Decision DoomThe Four Signs of Decision Doom

Blog: Decision Intelligence Institute International and comments from Dr. Marra

The Cost of Lost OpportunityThe Cost of Lost Opportunity

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The Four ‘Drivers’ of the cost of lost of opportunity:

Timing – slow speed of decision making The ‘window of opportunity’ is missed

Execution – flawed or flawless? Optimality of the decision – how far from the ideal

decision are you? Lack of a formal process - one which is not systematic,

integrated and comprehensive

The Cost of Lost OpportunityThe Cost of Lost Opportunity

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The Cost of Lost OpportunityThe Cost of Lost Opportunity& How it can Work Against You& How it can Work Against You

0%

100%

Planned Impact of Decision

Impact lost due to slow decision making

Impact lost due to poor execution

Net impact of decision

Impact lost due to sub-optimal decision

Impact lost due to lack of having a systematic, integrated, comprehensive approach

The Focus of Decision Making:The Focus of Decision Making:Domain Decision InfrastructureDomain Decision Infrastructure

And Key Decision PositionsAnd Key Decision Positions

Decision

Action

Modified by Dr. Ted Marra, Informed Decisions

What we need to know

Desired Outcomes

OurBehaviours

Big Decisions are about the future! Big Data Big Decisions are about the future! Big Data is about the Past – Steve Jobsis about the Past – Steve Jobs

The Focus of Decision MakingThe Focus of Decision MakingLarger, more complex decisions often intersect a number of domains within an organisation. In these cases it may be appropriate to break or decompose the decision into smaller pieces – ‘small moves smartly made’ works well even with so called ‘wicked problems’ (see Steve Tendon, ‘Hyper-Productivity’) as does ensuring involvement of those

most appropriate to the decision through Domain Decision Councils and their supporting SBITs (Strategic Business Improvement Teams). This approach can not only speed the decision making process but improve the quality or

optimality of the decision and reduce the time requirements for senior executives. Often there is a logical sequence that can be followed or elements that can be examined in parallel. Then the pieces can be brought together in a

collaborative meeting of all appropriate Domain Councils and their SBITs. Agility and resiliency must be maintained as keys to competitiveness!

OperationalExcellence Domain

Council

RelationshipMastery Domain

Council

Competitiveness andGrowth Domain

Council

Human PerformanceExcellence Domain

CouncilKey Decision

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Over the years of practise, Dr. Marra has found that forming at least four (4) key Domain Decision Councils each supported by a cross-functional strategic business improvement team of high potential individuals can not only speed decision making significantly, but get you closer to making an optimal decision – thereby minimising the ‘cost of lost opportunity’

The four Domain Decision Councils we recommend as a starting point are:

Operational Excellence Council Human Performance Excellence Council Relationship Mastery Council Competitiveness and Growth Council

The Value of a Domain Decision The Value of a Domain Decision InfrastructureInfrastructure

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As stated, each Council is supported by a Strategic Business Improvement Team (SBIT)

The members of the Council represent a subset of the leadership team (management committee)

They may NOT, however, always be the ‘usual suspects’. For example, the Human Performance Excellence Council may have the CIO

or CTO or CFO on it. The CEO is also assigned to a Council or possibly more than one. Attendance at meetings is mandatory!

The SBIT members also attend these meetings and in many cases make presentations/lead discussions to share progress or other data and information they have collected with the guidance of Council members to enhance the decision making process and monitor its impact. Development of individuals in the SBIT’s is also a prime objective – getting them ready to play larger roles in the organisation

In addition to the decision making accountability of the Council and involvement of the SBIT, these two groups should also bear responsibility for helping to build the capability of the organisation in the domain area consistent with the organisations Key Business Objectives and strategies

The Value of a Domain Decision The Value of a Domain Decision Infrastructure (continued)Infrastructure (continued)

An Example Relationship MasteryAn Example Relationship MasteryDecision Domain Council StructureDecision Domain Council Structure

““The Customer Listening Post Team”The Customer Listening Post Team”AT&T Universal Cards – A World-Class OrganisationAT&T Universal Cards – A World-Class Organisation

AT&T Universal Card ServicesManagement Led

Operations Feedback Strategies

Customer ExpectationResearch

Direct CustomerFeedback

ProcessManagement

Selected Feedback Strategies

Data Service ExamplesCustomer Satisfier Survey

Customer Value Tree

Data Source Ex.Cust. Satisfier Srvy.

Benchmarking

PerformanceResearch

Data Source Ex.Commendations

SuggestionsComplaints

Non-contact Assoc.Call MonitoringCust. RetentionERC Feedback

Data Source Ex.Cust. Contact

StandardsCust. Contact

MonitoringCall Type Trend

DataSee Item 5.2

Organisation Improvement Activities

Customer Listening Post Team

Long TermModification of Existing

Polities/Procedures& Standards

Short Term

Integration of Cust.Feedback into theStrategic Planning& Product/Service

Development Processes(see Item 3.1

Customer Relationship Management Strategies

Fee

db

ack

Lo

op

Strategic Decision Making:Strategic Decision Making:The Role of the Leadership TeamThe Role of the Leadership Team

Operational ManagementExecution &Excellence

Sensing System

Strategic Thinking;Competitiveness &

Growth;Teamwork

Leadership

Dr. Ted Marra

Strategic DecisionMaking

Create and Deliver Value;Achieve Optimality;Minimise the Cost of Lost Opportunity

Business Model/Context:

PurposeValues

Principles of Engagement

RenewalVision

Human Performance Excellence

Operational ExcellenceRelationship

Mastery

One View of the Strategic Decision One View of the Strategic Decision Making DomainMaking Domain

Our greatest managerial failure rate comes in the step from middle to top management. Most middle managers are doing essentially the same things they did on their entrance jobs: controlling operations and fighting fires. In contrast, the top manager’s primary function is to think. The criteria for success at the top level bear little resemblance to the criteria for promotion from middle management.

The new top manager, typically, has been promoted on the basis of his ability to adapt successfully. But suddenly he’s so far away from the firing line that he doesn’t know what to adapt to—so he fails. He may be an able man (or woman), but nothing in his work experience has prepared him to think. He hasn't the foggiest notion how one goes about making entrepreneurial or policy decisions. That’s why the failure rate at the senior-management level is so high. In my experience, two out of three men or women promoted to top management don’t make it; they stay middle management. They aren’t necessarily fired. Instead, they get put on the Executive Committee with a bigger office, a bigger title, a bigger salary—and a higher nuisance value because they have had no exposure to thinking!

Peter Drucker on the Matter of ‘Thinking’Peter Drucker on the Matter of ‘Thinking’The Basis of Sound and Strategic Decision MakingThe Basis of Sound and Strategic Decision Making

The Concept of Optimal DecisionsThe Concept of Optimal Decisions

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What is the cost of NOT making the optimal decision? What % of the decisions made by those individuals in the ‘key strategic

positions’ of your organisation are optimal? Are you at least playing a ‘zero-sum’ game?

How do you know?

Decision making in organisations covers a continuum from Level One to Level Five where Level 5 is Hyper-Decision making

Level One is characterised by such things as: People who tend to be indecisive; risk averse; or overconfident to the point of

recklessness or lack discipline; or are lone wolves – not team players A process which is ad hoc; focused on firefighting; takes the path of least

resistance; tends to be incremental There may be responsibility, but less accountability or sense of ownership;

sometimes the focus for decision making is blurred The IT systems and databases are fragmented; representing ‘islands’ of

information which are difficult to integrate; there is questionable data reliability HR systems do not recognise, reward or include in performance evaluation related

to key competencies of decision making The culture tends to be blame oriented; trying to find people doing something

wrong; draconian in nature

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Optimal DecisionsOptimal Decisions

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A decision will be considered ‘optimal’ if and only if #1 and at least 4 out of the remaining 7 criteria are met:

1. The decision either creates or delivers value or both to ensure stakeholders receive benefits

2. The decision is executed flawlessly to ensure the desired and/or maximum impact/outcome is achieved

3. The decision is in alignment with or consistent with the organisation’s purpose and vision

4. All behaviours and practises in which the organisation engages throughout the formulation and execution of the decision must be consistent with the values/beliefs of the organisation

5. The decision must contribute to enhancing the competitiveness of the organisation6. The decision must reflect/reinforce the organisation’s agility/resiliency7. The ‘cost of lost opportunity’ is minimised8. The decision is the right one for the business – better ensuring its long-term future

Another perspective: What decision will produce the greatest value for the most stakeholders in the least time and with the least investment?

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Optimal DecisionsOptimal Decisions

The Path to Hyper-Decision MakingThe Path to Hyper-Decision Making

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The Path to The Path to Hyper-Decision Hyper-Decision MakingMaking

Determine the Decision Intelligence Quotient of Your Organisation +Perform Gap Analysis

Identify your organisation’s key decision making positions

Select an Organisational Domain for Design and Development of Pilot ‘Sensing System’

Form an SBIT and Domain Council, Assign Ownership + Provide Support as Required

Design and Develop a Pilot ‘Sensing System’ including Integration of Analytical Techniques

Link Pilot ‘Sensing System” to a Systematic, Integrated, Comprehensive Decision Process

Assess, learn, innovateEnhance agility and resiliency

Formulate and Execute Rollout Plan to other Parts of the Organisation

Achieve Hyper-Decision Making& Enhanced Competitiveness

Outcome: Superior Organisational Performance

A Brief Note onA Brief Note onAgility and ResiliencyAgility and Resiliency

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Agility and ResiliencyAgility and ResiliencyDr. Ted Marra’s ViewDr. Ted Marra’s View

Agility: ‘The capability of an organisation to identify, assess and act (e.g., decideand execute) better and faster than competition’

Resiliency: ‘The capability of an organisation to anticipate/identify problems*, assess their severity and take appropriate corrective action with appropriate sense of

urgency to eliminate them and prevent their reoccurrence therefore avoiding unnecessary losses or collateral damage’

Recovery and a return to a normal performance trend is key. Focus is on minimising variability in the performance trend. A documentation/audit trail is a requirement. A lessons learned session is a key to future success:

What could we have done better? What could we have done differently? What could we have done faster? How could we have

developed a more innovative solution and what would that have been? What would the value have been? Did we have the right people involved?

* This includes ‘wicked problems’ – see Steve Tendon, ‘Tame the Flow and Hyper-Productivity’

A Senior Executives WorldA Senior Executives WorldDecision EnvironmentDecision Environment

Internal Organisational Working Relationships , Key

Strategic StakeholderRelationships &Segmentation

Cultural Profile (e.g., behaviours

and practises) and Evolution; Core

purpose;Vision;Mission

Agility, ResiliencyStrategic Information

Architecture,Big Data & Data Mining,

ManagingComplexity

Renewal:Innovation,Adaptation;Learning,

OperationalExcellence,Efficiency

Human Performance Excellence

LeadershipSystem,

ProfitableGrowth,

CompetitivenessStrategic Alignment &

Execution,All One TeamGovernance

Strategic Capability,Value Creation and Delivery,

Assessing Organisational Potential,Maintaining Competitive Advantage,

Long-term Sustainability*

© Dr. Ted Marra, Informed Decisions

* Sustainability includeskey financial measures

A Look at the Exciting and Sometimes FrighteningWorld Of Today’s Executive and Their Decision Environment